Arab outsourcing to move beyond the back office

Outsourcing companies in the Gulf are set to move up the value chain from providing back-office operations to IT and business process services was the message at the recent Arab Outsourcing Conference 2010 held in Dubai. Traditionally outsourcing providers have supported back-office operations but countries such as the UAE, Egypt, Jordan and Morocco have been making efforts to build up infrastructure, people and funds to develop the sector. Industry experts believe the outsourcing industry has been growing at a 20% annual rate in the Middle East.

Amin Khaireldin, Strategy Advisor and Board Member at Egypt-based Information Technology Industry Development Agency (ITIDA), said: "In Egypt we put resources in a business park-like Smart Village. From the premises, services such as financial analytics are conducted by 200 analysts for a Dubai-based company. Technical as well as packaged implementation services (PIS) are the focus."

Business process outsourcing (BPO) is another area gaining traction in the region. BPO involves the contracting of operations and responsibilities of specific business functions (or processes) to a third-party service provider. "Gulf-based companies are now considering taking BPO services from outsourcing firms in the Gulf. And Itida has been making investments towards acquiring international standards in this segment," added Khaireldin.

Gulf states are looking at upgrading skills of graduates in the BPO and PIS segments. PIS is expected to hit $3 billion (Dh11bn) by 2020 from the current US$200 million in the region," Khaireldin concluded.